"No Losses for Saemaeul Geumgo Users... Trust the Government Instead of Rumors"

Kim Ju-hyun, Chairman of the Financial Services Commission, 1st Anniversary Press Conference
Record High Supply of Policy-Based Microfinance
Establishment of Liquidity Risk Response System to Counter 'Digital Bank Run'

Kim Ju-hyun, Chairman of the Financial Services Commission, stated on the 7th regarding the signs of a bank run (mass withdrawal of deposits) emerging at Saemaeul Geumgo, which has been engulfed in crisis rumors, "Our government will utilize all policy measures to ensure that the citizens using Saemaeul Geumgo do not suffer financial losses."

Chairman Kim held a press conference marking his first anniversary in office at the Government Seoul Office in Jongno-gu, Seoul, in the morning, and said, "Please do not believe rumors but trust the government's words. As long as there is no outflow of funds due to anxiety, there is no problem with the soundness and depositor protection of Saemaeul Geumgo."

He emphasized, "I have heard from some YouTube channels that Saemaeul Geumgo is not subject to depositor protection, but this is absolutely not true. Saemaeul Geumgo is guaranteed up to 50 million won per person under the Saemaeul Geumgo Act, just like banks, and when there are concerns about the soundness of a specific credit union, all assets and liabilities are transferred intact to a sound credit union, protecting deposits exceeding 50 million won."

Chairman Kim continued, "The government has formed and is operating an inter-ministerial response team involving the Ministry of the Interior and Safety, Ministry of Economy and Finance, Financial Services Commission, and Financial Supervisory Service," adding, "I want to emphasize once again that this means the government will mobilize all available means to protect Saemaeul Geumgo users."

Financial Services Commission Chairman Kim Ju-hyun holds a press conference on the first anniversary of his inauguration at the Government Seoul Office in Jongno-gu, Seoul, on the 7th. Photo by Yoon Dong-joo doso7@

At the press conference held to mark his first anniversary in office, Chairman Kim emphasized that in the second half of the year, the focus will be on stabilizing the financial market and supporting vulnerable groups. He said, "To ensure a smooth landing of real estate project financing (PF), we will proceed with orderly normalization through a consortium agreement and a 1 trillion won support fund from the Korea Asset Management Corporation (KAMCO). We will also expand KAMCO programs that provide new funds to workout companies to support the prompt normalization of insolvent firms."

Regarding support for vulnerable groups, he explained, "We will expand the annual supply scale of policy microfinance from 10 trillion won to over 11 trillion won, supplying at an all-time high level. We will also prepare within the year the 'Policy Microfinance Efficiency Plan,' which includes expanding microfinance resources and improving the functions of the Microfinance Promotion Agency."

He also stated that financial innovation, including recently announced banking system improvement measures, will continue to be promoted. Chairman Kim said, "Now that the domestic financial market has regained stability, we will fully reorganize financial holding companies in the third quarter to enhance their competitiveness and revise regulations on separation of banking and commerce and on consignment and delegation of tasks to promote convergence between financial and non-financial sectors. We will also prepare regulatory improvement plans to support the overseas expansion of financial companies."

He outlined plans to revise financial regulations in response to technological developments such as digital bank runs. Chairman Kim explained, "As seen in the U.S. Silicon Valley Bank (SVB) incident where 42 billion dollars were withdrawn via smartphone banking within 36 hours, digital bank runs accelerate the spread of crises. We will reorganize the response system for liquidity risks in the financial system and reshape the financial regulatory framework to suit the changing times."

To eradicate unfair and criminal acts recently occurring in the capital market, he stated, "Based on the Capital Market Act and Virtual Asset Act passed in June, we will prepare subordinate laws, regulations, and detailed guidelines within the year. We will also establish an efficient supervision and inspection system and a close international cooperation system with related ministries, the Financial Supervisory Service, the Bank of Korea, prosecution, and police."